1980 and Beyond-The Expanding Horizons of Theatrical Features

I think it might be interesting and provocative to describe where the theatrical motion picture business has been in the last 25 years, where I think it is now, and where I think it will be going in the next two decades.

I want to begin with 1950, because in the year or two prior to that the theatrical motion picture industry had reached its zenith in terms of the total percentage of American dollars spent on entertainment-some 19% during the years of 1947, 1948 and 1949.

In 1950 two catastrophic happenings took place. One of these was the introduction of commercial television, which brought visual entertainment into the home without charge-and began what appeared to be the inevitable demise of attendance at the neighborhood movie. The second catastrophic occurrence was the suit by the Federal Government, in 1950, to separate the motion picture companies from their theater holdings. Up until that time, companies like 20th Century-Fox produced their films, distributed their films and exhibited their films primarily in their own theaters.

From 1950 on, all of the motion picture companies were required to divest themselves of their theaters and the subsequent owners or buyers of the 15,000 to 16,000 theaters that existed at that time then had a free market. They had a right to choose or reject the product offered by 20th, Warners, Metro and the other majors of the time. Therefore, the ability to grind out 30 or 40 pictures at a large edifice on Gower Street or Pico Boulevard was severely constrained-first, by the fact that the studios could no longer produce "MA AND PA KETTLE" or "LOVE FINDS ANDY HARDY", because audiences were getting the same thing at home without charge. secondly, even if they did produce "MA AND PA KETTLE", they couldn't put it into their own controlled theaters because there were, new owners of those theaters, and if they didn't want "MA AND PA KETTLE", they could go to another supplier of product.

For the next 15 years economic conditions in Hollywood deteriorated enormously. Studios substantially pared their overheads, they eliminated operating departments (such as electrical, transportation and camera), they cut out their contract players, they eliminated their contract directors and, as economic events foretold what was going to happen, box-office grosses dropped from $1,600,000,000 to about $900,000,000. Attendance declined even more catastrophically, because admission prices crept up and, by dividing those higher admission prices into the lesser boxoffice income, it became obvious that there were fewer and fewer people going to the movies. Also, only part of that slack, as far as Hollywood was concerned, was picked up by television. Television grew rapidly during that period, but in terms of the costs of running studios and maintaining stages and administrative staffs, television created only a minor dent in the economic problems which prevailed at that time. This, parenthetically, was the period when I was becoming increasingly involved in the executive echelon of the motion picture business.

At the same time-and obviously, it followed-motion picture theaters began to drop by the way. A combination of the move to suburbia and the impact of the competitiveness of television reduced the number of theaters from about 16,000 to about 11,000 at the absolute bottom of the cycle, which was reached between 1966 and 1970. However, in 1971 and 1972, we began to see a resurgence in the industry. The momentum increased and, especially during the last two years, we have witnessed an extraordinary rise in box-office income and attendance at the movies.

This turnabout has been the result of several factors, including the willingness by the motion picture companies to gamble many, many millions of doliars on so-called "catastrophe" pictures (beginning with "THE POSEIDON ADVENTURE") and culminating in larger and larger films, as exemplified by pictures like "STAR WARS" and "CLOSE ENCOUNTERS". …

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